Industry core view:
Event: on January 4, the digital RMB (pilot version) app was launched in the Apple App store and various Android application markets. It is open for pilot registration in Shenzhen, Suzhou, xiong’an, Chengdu, Shanghai, Hainan, Changsha, Xi’an, Qingdao, Dalian and Winter Olympic Games (Beijing, Zhangjiakou).
Key investment points:
From the bank channel to the opening of the app to the shelves, the audience has been fully expanded: in the previous round of tests, users in pilot cities need to go to offline outlets for audit and registration to open the digital RMB wallet, and can register and open it only after obtaining the app exchange code provided by the six major state-owned banks. This time, the digital RMB app was put on the mainstream app store, and all users in the pilot area can download and install it directly through their mobile phones. Compared with the previous beta version, the digital RMB (pilot version) app has added features such as face recognition login and verification, auxiliary verification method, money receipt and so on. According to Mu Changchun, director of the digital currency Research Institute of the people’s Bank of China, speaking at the 2021 meeting of Hong Kong financial technology week, as of October 22, 2021, 140 million digital RMB personal wallets and 10 million corporate wallets had been opened, with a cumulative number of transactions of more than 150 million and a cumulative transaction amount of about 62 billion yuan. We believe that the opening and function upgrading of the digital RMB app is expected to fully mobilize the enthusiasm of users to open the digital RMB wallet, and the number of users may usher in rapid growth.
The diversification of operation entities and the increasing access to merchants: the operating institutions of the current number of RMB APP can be opened, including the six major state-owned banks, such as workers, agriculture, China, construction, trading and postal savings, and the Bank of China Merchants, which has a long history of retail business, as well as the Internet Banking (Alipay) and micro public bank (WeChat payment). At the same time, the digital RMB app supports cardholders of other commercial banks to recharge the digital RMB wallet opened in the operating institution. The sub wallet access scenario covers five categories: shopping, travel, life, tourism and others. There are more than 50 third-party apps that support optional associated consumer transactions.
The Winter Olympics has opened a wide range of application scenarios, and the implementation progress of DCEP is expected to accelerate again: according to Mo Wangui, deputy director of the Institute of finance of the people’s Bank of China, as of October 2021, the digital RMB pilot has been implemented in 359000 Winter Olympics scenarios, covering seven categories of scenarios, such as transportation, catering and accommodation, shopping and consumption, tourism and so on. It is noteworthy that, different from the previous tests in various pilot cities, the digital RMB test under the Winter Olympic Games is oriented to Chinese and international users at the same time, opening a new application scenario of transnational and cross currency payment of digital RMB, which will further strengthen the construction of digital RMB ecosystem.
Investment suggestion: the progress of digital RMB landing is expected to be further accelerated in 2022. It is suggested to pay attention to the transformation of banking system, software and hardware wallet, scenario promotion and operation requirements brought by the establishment of digital RMB ecology. The beneficiary objects include bank IT manufacturers, terminal payment equipment manufacturers, third-party aggregate payment manufacturers, etc.
Risk factors: the promotion progress of digital RMB is less than expected; Industry competition intensifies; Macroeconomic downside risk.
